Executive summary / Overview

ReThes is a 1-year old eCommerce business in the Health & Beauty vertical. The business reports annual revenue $815,294 and annual profit $143,640 (≈17.6% net margin). The seller’s asking price is USD $170,000, which aligns with the stated multiples (profit multiple 1.2× and revenue multiple 0.2×).

Important immediate caveats:

• The package contains contradictory statements (e.g., one place says revenue ≈ $748K and DA “strong”, another lists domain authority 2).

• Revenue and profit are highly concentrated in April–May (≈73% of annual revenue, ≈81% of profit). That concentration is the single largest risk factor and requires explanation from the seller.

• Several useful metrics are missing (ad spend, traffic, SKU list, fulfillment model, supplier contracts, inventory valuation). These must be requested and verified.

All information used in this report is from public research and the materials you supplied. To reach a purchase decision we must obtain additional seller documents (see Due Diligence Checklist at the end) and ask the seller: why are you selling? and what caused the Apr–May spike?

1) Financial Report

Annual headline numbers (from supplied data)

2) Key Unit Economics & Data Checks (Calculated)

Red flags from these metrics

• Orders per customer = 0.444 (< 1) is impossible under normal definitions if “customers” = unique buyers. This implies data mismatch: either the “customers” number includes non-buyers (e.g., leads), or orders/customers are measured differently. Verify definitions.

• Email list size (~36k) is large compared to orders (16.9k). Either list quality is poor or many subscribers never bought  ask for email-driven conversion metrics and campaign performance.

3) Website Performance & Metrics (What we can say from available data + actions to take)

What we know / concerns

Domain Authority reported as 2 — that is very low (contradicts language claiming “strong domain authority”). Low DA → weak organic SEO foundation and limited durable organic traffic.

No site speed numbers, no Google Analytics / Search Console data, no traffic sources breakdown were provided.

Immediate technical checks to run (must request access)

1. Lighthouse / PageSpeed Insights audit (desktop & mobile) — prioritize image compression, server response, third-party scripts, and caching.

2. GTmetrix waterfall to check blocking resources.

3. Crawl with Screaming Frog to identify broken pages, metadata, duplicate content.

4. Search Console: impressions, CTR, top queries, manual actions.

Product & catalog

• SKUs / product variation: Not provided. Need SKU list, SKU-level sales for last 12 months, stock on hand, supplier lead times.

• AOV = $49.00 — reasonable for health & beauty (single-purchase items or smaller bundles). Opportunity: increase AOV with bundles, subscription, value packs.

Conversion & conversion drivers

• Website conversion rate: Not provided. Must obtain sessions / conversions. Without traffic data, conversion rate and CAC cannot be computed.

• Site design & UX: Unknown (no screenshots provided). Health & Beauty relies heavily on visual trust, clear benefit claims, and social proof , the zero Trustpilot reviews (see below) is a credibility gap.

4) Marketing — Paid & Organic (Analysis + Opportunities)

What we don’t have: channel spend, ROAS/CAC, traffic by channel, creative library, and landing page performance. Those are critical ask items.

Likely current mix & immediate hypotheses

• The massive Apr/May spike strongly suggests either: a paid advertising campaign that scaled; a wholesale/bulk order; a viral influencer or TikTok event; or marketplace/partner fulfillment. Confirm which.

• With a DA of 2, organic search was likely not the driver for the spike. Paid channels (Meta/Google/TikTok) or a distribution partner more likely.

Marketing recommendations

• Immediate: Request ad accounts (Facebook/Google/TikTok) and last-12-month ad spend/ROAS. If ad spend is zero for high months, spike was likely non-repeatable (one-off).

• Short term growth levers:

• Recover repeat rate and retention flows: welcome series, replenishment emails, post-purchase cross-sells, SMS.

• Implement subscription model for replenishable items.

• Upsell bundles at checkout to lift AOV (+20–40% potential).

• Build basic reviews program (post-purchase review email + incentives) — Trust / CRO win.

• Start a focused, low-cost influencer/TikTok test for hero SKUs (CPL experiments).

• SEO/organic: DA 2 ⇒ prioritize content, backlinks, and technical SEO; low baseline means you can gain wins quickly with a modest investment.

CAC guardrails (back-of-envelope)

• Net profit per order = $8.49. If this is your true contribution margin, maximum sustainable CAC to maintain current net profit is < $8.49 per order (i.e., you cannot pay more than that without eroding profit).

• However, if you acquire customers who repurchase, effective LTV rises — check repeat rate and purchase frequency.

5) Operational Efficiency & Supply Chain

Unknowns to verify

• Fulfillment method: in-house, 3PL, dropship, FBA? (This affects margins & risk.)

• Inventory ownership vs consignment.

• Supplier contracts, unit COGS, MOQ, lead times, and alternative suppliers.

• Returns rate, refund policy, shipping times, shipping costs, and dispute/chargeback history.

Operational risks

• If the model is dropship with long lead times, scaling paid traffic is risky (fulfillment failures → returns → ad bans).

• If inventory is held, verify valuation and shrink/reserve for returns.

Operational improvements

• SKU rationalization: identify top 10 SKUs that drive 80% gross profit — simplify catalog.

• Negotiate better COGS with suppliers or move to private labeling for higher margins.

• Improve fulfillment SLAs and implement 3PL KPI tracking.

6) Customer Data & Relationships

Observations

• Email list of 36,166 is a valuable asset — but value depends on quality, opt-in type, and historical open/click/purchase rates.

• Zero Trustpilot reviews — low external social proof. The brand should be asking for feedback and seeding reviews (compliant with platform rules).

Questions to ask seller immediately

• Provide customer file with anonymized order-level history (order date, SKU, AOV, returning buyer flag).

• Provide email campaign performance (opens, clicks, revenue attributed).

• Refund & return rate by month and SKU.

• Top 10 customers by revenue (to check revenue concentration among buyers).

• Any subscription/churn data if present.

7) Legal & Compliance Due Diligence

Health & Beauty specific checks

• Verify that product claims are compliant with FDA (US) rules — no drug claims unless approved. Review product pages for unapproved therapeutic claims.

• Ingredient compliance: any restricted ingredients? (e.g., some chemicals are regulated).

• Safety testing and documentation for ingestible / topical products (if applicable).

• Labeling compliance (ingredient list, country of origin, warnings).

• GMP/manufacturer certifications (if private label).

• Privacy policies, cookie banners, and CCPA/CPRA compliance if selling to CA residents.

• If selling internationally: customs, taxes, and local compliance.

General legal checks

• Registered business entity & tax filings.

• Any pending or past disputes, chargebacks that became legal issues.

• Intellectual property: brand trademarks, domain ownership, social handles.

• Insurance: product liability insurance levels and history of claims.

8) Trust & Reputation — Trustpilot = 0

Having zero Trustpilot reviews in a crowded health & beauty niche is concerning:

• It removes an important source of social proof for conversions.

• Could mean the brand is new to public reviews or the list was purchased (sign-up growth may not equal buyer growth).
  Action: Request alternative review sources (Shopify reviews, Amazon, platform comments), and request a sample of customer emails that left feedback (anonymized). Post-acquisition, run a review-gathering campaign immediately.

9) Valuation Commentary & Negotiation Posture

Valuation math (from supplied multiples):

• Profit multiple: 1.2× × $143,640 = $172,368.

• Revenue multiple: 0.2× × $815,294 = $163,059.

• Seller asking: $170,000 — sits between these implied valuations.

However — risk adjustments to consider

• High concentration risk (Apr–May): large downside if spike cannot be repeated.

• Data inconsistencies (customer vs orders, DA claims): increase due diligence and discount.

• No ad account / traffic visibility: unknown CAC and channel stability.

Recommended acquisition structure

• Initial offer range: $120k – $150k upfront, with earnout / holdback up to $170k if revenue/profit targets are met over 6–12 months. (Example: 70% upfront, 30% earnout tied to achieving 6-month average revenue/profit thresholds).

• Consider escrow of 10–20% for 6–12 months to cover undisclosed liabilities or returns.

• Require representations & warranties and a working capital / inventory adjustment in final docs.

10) Key Insights (short)

1. Revenue & profit heavily concentrated in Apr–May (≈73% of revenue; ≈81% of profit) — must verify whether this was a one-time event (bulk order, promotion) or repeatable channel success.

2. Net margin (~17.6%) is acceptable for a 1-year old eCommerce brand, but profit per order is low (~$8.49) — leaving little room for CAC unless repeat purchases raise LTV.

3. Data inconsistencies (customers vs orders, contradictory DA claims) weaken confidence in the dataset — ask for raw reports.

4. Trust & social proof gap (Trustpilot = 0) and low DA present both a conversion drag and an opportunity (relatively inexpensive wins available).

5. Asking price aligns with multiples, but given concentration and data gaps, structure with earnout/holdback is recommended.

11) Challenges Identified (detailed)

• Single-point seasonality / concentration — if Apr–May were single events the underlying baseline revenue is small and brittle.

• Insufficient social proof (0 Trustpilot reviews) and low domain authority → conversion & organic growth headwinds.

• Unknown CAC / channel dependency — if most revenue was paid-media driven, check whether creative, audiences, and budgets are transferable to a new owner.

• Margins and fulfilment: low profit per order limits scalability unless COGS or logistics are improved.

• Data mismatches raise the possibility of misreported KPIs or inconsistent metrics definitions.

• Regulatory risk — health & beauty category has compliance traps; product claims or ingredients could raise liability.

12) Recommendations (what to request from seller now)

Top documents to request immediately (priority):

1. Full merchant P&L for the last 24 months and bank statements to reconcile revenue.

2. Shopify (or platform) access / order export (order-level CSV with SKUs and customer IDs).

3. Google Analytics & Search Console access (or screenshots if seller reluctant).

4. Ad accounts (Meta/Facebook, Google Ads, TikTok) and last-12-month ad spend and ROAS.

5. Supplier agreements, invoices, and COGS breakdown per SKU.

6. Inventory report (SKU, qty, valuation) and fulfillment method (3PL contract or warehouse receipts).

7. Refunds/returns/chargeback history and policies.

8. Customer file (anonymized) and email campaign reports (revenue attributable to email).

9. Product compliance docs (labels, ingredients, safety testing) and insurance certificates.

10. Explanation in writing for Apr & May 2025 revenue spike and proof (invoices, PO, campaign screenshots).

Operational / commercial recommendations if you proceed:

• Insist on earnout due to concentration risk.

• Immediate post-acquisition priorities: stabilize fulfillment, lock suppliers, launch review generation program, run small paid tests with new ad accounts, and implement retention flows to lift LTV.

• Quick wins to raise profitability: negotiate supplier pricing, launch subscriptions, bundle best sellers, and optimize checkout to upsell.

Conclusion

ReThes is an early profitable eCommerce asset with a reasonable asking price relative to the supplied multiples. However, material risks (revenue concentration in 2 months, data inconsistencies, weak domain authority, and no visible social proof) mean this acquisition should not be priced as a stable, recurring business without answers and documentation.

If the seller can clearly demonstrate that Apr–May revenue was driven by repeatable marketing/wholesale channels (and provide ad accounts, P&L bank reconciliations, supplier proof), the business could be a value buy. If Apr–May was one-off, the business requires significant post-acquisition investment to scale and diversify channels.

Recommended approach: Proceed to an information-gathering/data-verification stage with the items listed above. If answers are satisfactory, structure the deal with an earnout / holdback to de-risk the spike and the unknowns.

Short actionable next steps (one-line):

1. Request the 10 priority documents above.

2. Get seller’s written explanation for Apr–May 2025 spike + supporting evidence.

3. With ad account and analytics access, compute CAC, true channel mix, and conversion rates — then reprice/structure offer accordingly.